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Mortgage Articles

Why use a mortgage broker versus a bank or lender?

A home loan mortgage broker is an independent real estate financing professional who specializes in the origination of residential/ commercial mortgages. Capital sources act as loan wholesalers. The broker passes on the actual funding and servicing to these loan wholesalers. They may be contractors working with a number of wholesale lenders. Mortgage broker firm operations originate over half of all the real estate loans (residential) in the US.

A home loan mortgage broker has the best professional expertise with direct access to hundreds of loan products, providing consumers cost-effective and efficient options that cater to their specific needs. The mortgage loan broker would assess the financial details of the customers and search through the posted rates to find the best one for the customer. Real estate broker provides consumers with:

The process of mortgage lending is a complex one. The real estate broker acts as a mentor to the consumer, guiding him through the entire process, offering extensive choices and balancing the customer's financial goals.

They use innovative loan packages to allow low-to moderate-income borrowers, with less than perfect credit histories, to enjoy the benefits of home-ownership.

A home loan mortgage broker is neither a mortgage lender nor a banker. He is a real estate financing professional acting as an independent contractor. The range of products and services offered by them is growing everyday. Under certain circumstances, a real estate negotiator may act as a banker, when funding loans.

A home mortgage broker also provides the best help in assessing the requirements and saving the time. Home mortgage loan brokers have contacts with many lenders, this aspect enables them to offer cheap loans to the borrowers. They also offer advice on the ways of overcoming the barriers to loan qualification. Several federal laws and regulations and dozens of state laws and licensing boards regulate the home real estate brokers.

The wholesale lender underwrites and funds the home loan. Servicing the loan payments and ensuring compliance guidelines has also to be overseen.

Mortgage Brokers

The following requirements must be completed for a wholesale lender to evaluate a consumer's home loan request:

Real estate negotiators provide the same services to consumers as do retail loan offices that charge the consumer an origination fee. These services include taking the application and obtaining the credit report and appraisal. They counsel the consumer on the loan process and also collects the necessary documents. They provide separate and distinct services and facilities to wholesale lenders. They market the lender's products. Assembling and delivering the completed loan package is also the responsibility of such brokers.

Mortgage lenders may pay the such brokers a premium, (called a "yield spread premium" or a "service release premium"), this includes compensation for the services and facilities, and also represents payment for the intrinsic market value of the closed loan. Regardless of which party provides compensation (lender or consumer), in almost all cases the broker receives nothing until the loan closes.

National Association of Mortgage Brokers (NAMB)

The National Association of Mortgage Brokers was established in 1973 and is the primary trade association representing the community. The association has affiliates in 46 states of the United States and promotes professional certification. A home loan broker who is a member of the association has to subscribe to the code of ethics and best lending practices in his profession. He is an intermediary between the consumer and lender in a mortgage transaction, and therefore he must be completely thorough in the mortgage process.

A real estate broker can provide the consumer with a numerous options in home financing on account of his extensive links with numerous banks and lenders. If the broker is domiciled in a state that is affiliated to the association, he has to apply for membership at the state association. Otherwise, he can apply for NAMB membership directly. Commercial mortgage broker membership is open to mortgage professionals who primarily practice in the commercial mortgage sector.